EXPERIMENT IN STATE CAPITALISM 77
northern tribes were followed by temporary treaties of uneasy peace.
The terms of the treaties were humiliating to a Chinese emperor, for
while some of these kingdoms acknowledged the emperor, it was not
they but the emperor who had to give annual contributions in silver
and silks to the northern tribes, running anywhere from a hundred
thousand to a quarter of a million dollars a year. This acted as a
tremendous drain on the imperial treasury. The domestic administra-
tion had always been lax, and the government was constantly running
into financial deficits. Wang Anshih believed that he was a great
financial wizard who could raise money for the imperial treasury by
juggling with the systems of taxation and conscription. I believe that
the desire to build China into a powerful state and to increase the
prestige of the empire through wars of conquest in the north-west
were prime factors in influencing the young emperor Shentsung in
Wang Anshih's favour, for Wang's administration was characterised
by several wars started by China with the northern tribes, some
victories and one disastrous defeat. In order to carry on wars, the
Emperor needed money, and in order to have money, the country's
financial system had to be reorganised. Yet, without ever questioning
the sincere motives of the reformer, we shall see how these reforms,
financial and economic in character, produced the most grievous con-
sequences of a different nature.
Soon after Wang Anshih had arrived at the capital, Szema Kuang
had an argument with him in the Emperor's presence which seems
to sum up the fundamental opposition of the two sides. The imperial
treasury was actually impoverished at this time, and during an im-
portant ceremony at the worship of Heaven in spring, the Emperor
wished to dispense with the customary gifts of silver and silks to the
officials, thus saving some money for the imperial household. This
started an argument between Szema Kuang and Wang Anshih. Wang
Anshih maintained that the ^national treasury was impoverished only
because the officials did not understand finance.
"What you mean by finance," countered Szema Kuang, "is only
increase of taxation and levies from the people."
"No," said Wang Anshih. "A good financier can increase the
government revenue without increasing taxation."
"What nonsense! After all, a nation possesses a definite amount of
wealth, and this wealth is either in the hands of the people or in those
of the government. No matter what measures you carry out or by what
names .you call them, they can only mean taking away part of the
wealth of the people and giving it to the government."
The Emperor was inclined to agree with Szema Kuang, and for a
month or two the measures were held in abeyance.